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[09:30:38] POPPY HARLOW, CNN ANCHOR: Overnight, in a CNN exclusive interview, Vice President Mike Pence issuing a stern warning to Pyongyang, the U.S. will crush any launch of conventional or nuclear weapons. He also downplayed a bungled message from the Trump administration on those warships that were supposed to be en route to the region a long time ago but weren't. Our Dana Bash has the exclusive.

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DANA BASH, CNN CHIEF POLITICAL CORRESPONDENT: Last week the U.S. military and the administration announced that another ship, the USS Carl Vison, was heading toward the Korea Peninsula. And the White House said it was a powerful deterrent, vis-a-vis North Korea. And now we learn that it wasn't. In fact, it was going the other direction. So were these misleading comments deliberate?

MIKE PENCE, VICE PRESIDENT OF THE UNITED STATES: Oh, I think not. Look, we've got an extraordinary commitment of U.S. forces in this region. And the Carl Vinson and that battle group are being deployed to the Sea of Japan and will likely arrive here in the coming weeks. But the presence of U.S. forces, as I saw firsthand in South Korea, more than 30,000 personnel, here in Japan more than 50,000 personnel being aboard the USS Ronald Reagan and seeing these extraordinary soldiers and sailors, airmen and Marines gives me great confidence that the United States presence in the Asian Pacific is strong and under President Trump's leadership it will be stronger still.

BASH: Let's talk about North Korea and what you've been saying while here in the region, that the strategy of the U.S. will be to reach out to allies in the region and that the best path to dialog, you're saying, is through a family of nations. I've got to tell you, that sounds a whole lot like the six party talks back in the Bush administration that failed. How is your policy different?

PENCE: I think that the president has made it very clear that after more than two decades of failed dialogue, and even what was called strategic patience, that the patience of the United States and our allies in this region has really run out and that we are now going to begin to take such measures, diplomatically and economically, to isolate the regime in Pyongyang. And the encouraging news, Dana, for anyone looking on, is that because of President Trump's leadership, we're not only seeing our allies in South Korea and Japan and in the wider world standing with us, but China has taken unprecedented steps now to begin to economically isolate North Korea. And given the fact that China represents more than 80 percent of the exports from North Korea is enormously important to their economic marketplace. We believe this is an important step forward.

BASH: So I just want to try to drill down on the diplomatic side of this a little bit more. Will the U.S. actually sit down in any way, shape or form for diplomatic negotiations with North Koreans?

PENCE: You know, whether you go back to the agreed framework of the 1990s, or the six party talks -

BASH: Well, not that, just looking forward, whatever - whatever version it would be, will there be any negotiating, whether it's direct? I mean you can answer that. Can you see a direct negotiation with North Korea and the U.S.?

PENCE: I think not at this time.

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BERMAN: All right, I want to bring in CNN military and diplomatic analyst, retired Rear Admiral John Kirby, and former U.S. ambassador to Iraq and Turkey, James Jeffrey, with us as well.

Admiral, let me start with you.

The vice president told Dana that the goal of the Trump administration remains to achieve a nuclear free Korean Peninsula. Isn't it a little bit late for that? I mean North Korea has nuclear weapons at this point. They have nuclear devices that they've tested. So don't you have to look for a new goal?

REAR ADM. JOHN KIRBY (RET.), CNN MILITARY & DIPLOMATIC ANALYST: Well, no, we're - look, they certainly are moving forward in testing and developing nuclear weapons capabilities. There's no doubt about that. But that's the same approach that the previous two administrations had, which was to seek a de-nuclearized Korean Peninsula. So I think it's still a worthy goal. And I think it's one supported not just here in the United States, but by our allies and partners in the region. So I - I think they still should pursue that. That should still be the end outcome is no - no nuclear weapons on the Korean Peninsula.

[09:35:05] HARLOW: But at what point, ambassador, does, you know, a nation have to take a lesson from failed attempts in the past? I mean, you know, the admiral's point is, this is what the goal should ultimately be. But at what point do you have to have a really check and say - or do you - does this administration have to have a reality check and say it's not possible, they haven't shown us anything in the past, you know, decade that says that is possible.

JAMES JEFFREY, FORMER U.S. AMBASSADOR TO IRAQ AND TURKEY: Poppy, what's different is the North Koreans are moving towards the ability to strike the United States with a long-range nuclear-tipped missile. That changes the game. There's not going to be any solution short of a war, which everybody rules out, unless China changes its underlying policy. What the Trump administration is trying to do is to shake China, pressure China, play with the thought of war to get China to do something China clearly doesn't want to do, which is to really put North Korea under economic and diplomatic pressure.

BERMAN: Ambassador, let me ask you, you say that's what we should be doing. Do you see any signs that it's working with China?

JEFFREY: It has worked to some degree, as Vice President Pence said. They've cut off exports of coal from North Korea. I still do not see - although there's a debate now in China for the first time - I do not see China waking up - yes, among historians of the Korean War are saying North Korea is not our ally. And China needs to understand that it cannot use North Korea as a pawn in its larger competition with the United States. And up to this point they have not crossed that Rubicon (ph).

HARLOW: All right, we have to address something across front paper - front pages of the - all the papers this morning. I mean, the fact, admiral, is that the president came out last week and said, quote, "we are sending an armada, warships, to the Korean - you know, to the East Sea, to the Sea of Japan. That armada was actually, we now know, headed in the opposite direction 3,500 miles away to the Indian Ocean for these exercises. The White House says miscommunication. But they didn't even come out and correct the record. The Pentagon didn't even come out. This may never have come to light if the Navy hadn't posted a photo of where the Carl Vinson aircraft carrier actually was.

KIRBY: Yes. Well, let's, first of all, get the terms right. We haven't used the word "armada" in the Navy for I don't know how long. I think the last one was the Spanish in 1968. So a long time ago.

BERMAN: (INAUDIBLE) for them.

KIRBY: It's a carrier strike group and it's a carrier and four escort ships.

HARLOW: Yes.

KIRBY: So let's be clear about what it is and what isn't it.

Secondly, I think a lot of things happened here and I think the Pentagon has owned the fact that from a communications perspective, from a public relations perspective, they could have done a better job being more clear about what the Vison and her escort ships were going to be doing when they left Singapore. The truth is that they accelerated the start date of this exercise with the Australians and they even curtailed the length of it so that she could get it done and then start heading north. They just weren't very clear about that.

The second thing that happened was, from an operational perspective, there wasn't a lot of clarity in terms of moving that information up the chain of command. So I actually think that the White House should get a pass on this. I think the information didn't filter up to them the way it should have from the military and the Pentagon and, you know, it's unfortunate but I don't think there's any malfeasance here. BERMAN: Well, you say they could have done things differently. They

could have told the truth, you know, And the White House could have told the truth. And when they knew that it was being reported differently than what the truth was, they could have corrected it, you know, and they didn't.

KIRBY: Yes.

BERMAN: You know, they let this hang out there.

KIRBY: Well, that was, I think -

BERMAN: You know, and -

KIRBY: Yes.

BERMAN: And, I mean, I'll ask, you know, the ambassador here. You know, as a reporter, you know, how can you trust what's being said? When something like this happens, what are you supposed to take for this? You know, we can't - we don't have satellites. We can't look down and see if every carrier is where we're told it's headed right now. So what are you supposed to do with that, ambassador?

JEFFREY: John, I was hoping you'd direct all your carrier questions to the admiral. He knows this better than I. But, look, I served in the White House. I was involved in a lot of military operations. This kind of mistake happens all of the time. People fumble about and then they try to backtrack and you get that.

The larger issue is this North Korean situation is truly dangerous for the first time soon for the American people and clearly for the South Koreans, the Japanese and for the people of North Korea.

HARLOW: Admiral, thank you. Ambassador, thank you as well.

JEFFREY: A pleasure.

HARLOW: We're out of time. You will both be back.

Coming up for us, in just moments, a major religious liberty case faces the high court. Supreme Court Justice Neil Gorsuch gets this one on his first week. We'll talk about that straight ahead.

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[09:43:39] HARLOW: So, in just moments, newly confirmed Supreme Court Justice Neil Gorsuch will hear arguments in his first major case. This is a case about a church-run preschool in Missouri that is suing the state after they were denied funds to build a safer playground for children.

BERMAN: Yes, this is a big debate about religious freedom, religious spending, religious liberty, all within the first week that Neil Gorsuch is on the court. Our Supreme Court reporter Ariane de Vogue has this for us.

Ariane, what are you expecting to hear?

ARIANE DE VOGUE, SUPREME COURT REPORTER: Well, John and Poppy, this religious liberty case actually begins with recycled tires. In 2012, Missouri came up with this program, it wanted to give schools subsidies to use recycled tires to surface their playgrounds, you know, to make them bouncier, safer for kids. But the dispute began when a church-run preschool applied for the grant and was denied. The state said, look, our state constitution says that we can't give state funds for religious activities. And the church came back and sued and said, look, you can't give these funds to everybody, all these non- profits, and not us. That's discrimination. So that's the issue before the court today in this big case because if the court rules in favor of the church, it's going to narrow the separation between church and state.

And, of course, everybody, as you said, is going to be watching Justice Neil Gorsuch. This is his first full week, first big argument and a lot of people say that he could be the deciding vote in this case.

[09:45:08] John and Poppy.

HARLOW: Ariane de Vogue, thank you very much. She'll be watching it for us at the high court, I know.

Also, of course, this morning, news that former President George H.W. Bush is back in the hospital. He's recovering from pneumonia. We're told that the 92-year-old former president is in good spirits. Right now is expected to spend a few more days in the hospital for observations.

BERMAN: Yes, he was admitted Friday with a cough. It kept him from sleeping. The former president is recovering at the same Houston hospital that treated him this past January for a similar and we're told more serious issue then.

All right, this morning, a huge question, does Bill O'Reilly still work at Fox News? And if the answer is yes, for how much longer will it be yes? You might be surprised by the answer.

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[09:50:18] BERMAN: All right, new developments this morning that could up-end the television industry. Signs that Bill O'Reilly could be out at Fox News within, like, two days. A network board meeting taking place tomorrow could decide the anchor's fate.

HARLOW: So the pressure is mounting, we're hearing, to nix the host after a string of sexual harassment settlements. Our senior media correspondent, host of "Reliable Sources," Brian Stelter, is here with more.

You know, a lot of this was not new. "The New York Times" reporting put it together. And now this board meeting tomorrow. What are you hearing? BRIAN STELTER, CNN SENIOR MEDIA CORRESPONDENT: Yes, the spotlight now on O'Reilly as a result of "The New York Times" story and an advertiser boycott. You know, dozens of advertisers have abandoned "The O'Reilly Factor," which increased the pressure on the Murdochs. A source said to me yesterday, there are exit talks that are starting between O'Reilly and Fox. Nothing definitive yet. Some of O'Reilly's allies are denying that saying, no, as of now, he'll be back to work on Monday. Remember, he's on vacation right now in Italy. So he doesn't know if he'll be back on the air on Monday.

It is unlikely, though, that he will be returning. The board meeting on Thursday is pivotal. Murdoch - Rupert Murdoch and his sons and the board all getting together, talking through these issues. But the writing seems to be on the wall. All the news reports, including from Murdoch's own "Wall Street Journal" -

BERMAN: Exactly.

STELTER: Indicating he's on the way out.

BERMAN: And the writing's not just on the wall. It's in every paper enlarged (ph) in the same way.

STELTER: It's in the print (ph), yes.

BERMAN: And you were out in front, along with Gage Sherman (ph). But when you see it in "The Wall Street Journal," "The New York Times," and "The Washington Post" with largely the same language, Fox is getting this out there in a way that indicates that Bill O'Reilly's days are numbered there.

Laura Coates, again, a lot of this was known before, but "The New York Times" put it together a few weeks ago, $13 million in settlements between Fox and Bill O'Reilly. Is there a legal reason that their hand has been forced now or is this just bad PR that they're sick of dealing with?

LAURA COATES, CNN LEGAL ANALYST: Well, it could be a little bit of both, but their hand has certainly been forced for one primary reason. When you had the Gretchen Carlson issues and scandals (INAUDIBLE) to Megyn Kelly, there was a thought that this was something that Fox News was not aware. That this was an isolated incident. That perhaps the employer should not be liable for what they do not know.

But now you have the issue of there being settlements. And certainly it hints that there's this culture of a hostile workplace environment was certainly known. It was paid for to some degree. And now they have their hand forced because when an employer knows about it and there's any tangible work action related, like if there's a demotion, if there's a firing, if there's a mistreatment, those two go hand in hand to now make Fox News liable.

HARLOW: So here's what Bill O'Reilly's attorney is saying in a statement. "Bill O'Reilly has been subject to a brutal campaign of character assassination that is unprecedented in the post-McCarthyist America. This law firm has uncovered evidence that the smear campaign is being orchestrated by far left organizers bent on destroying O'Reilly for political and financial reasons." Smear campaign, Brian, by the far left. That's their legal case, it sounds like.

STELTER: That's the argument. This is a lawyer well known as a pit bull. He's also represented Donald Trump in the past. It is true that some liberal groups are calling for O'Reilly's ouster. One of those groups organized a protest outside of Fox News headquarters yesterday. But it is Bill O'Reilly who paid these settlements in the first place. There are tapes in a couple of the cases of O'Reilly's own behavior. He has said the other claims are meritless, but this is, simply put, this is Fox and O'Reilly that - where this story lives. It is liberal groups that are now jumping on trying to encourage Fox to remove O'Reilly, but it started with the man himself.

BERMAN: And it could be that that lawyer's note right there was to shape the post-Fox narrative for Bill O'Reilly, set up whatever career he might have in book writing or speech giving, whatnot, after this.

STELTER: Great point. I think there are upstart conservative cable news channels that might be interested in hiring him.

BERMAN: Right. So, Laura, his contract, the Bill O'Reilly contract, which was, we believe resigned right after a lot of these allegations were made. It has a moral turpitude clause for things that happen after the contract. But given that these incidents may have happened before the contract signing, does that give Fox cause still to fire him?

COATES: Well, that term "moral turpitude" is very (INAUDIBLE) for a lot of people in - I think with good reasons because you don't want to have to have a definitive reason in which to fire someone. You want to have a discretion and leverage to be able to exercise your judgment based on maybe advertisement or your corporate culture and you want to be able to use that clause to say, listen, this goes against our company values, our office morale, our firm culture, and that's what we're trying to do here. So it can be used as additional leverage to give this - what could have been otherwise, you know, a firm, locked contract into an at-will employment that says, listen, you have violated some of our clauses. We have every right to fire you. He will be paid out, I'm certain, if he is let go from the network. But certainly they would have more cause to have leverage over him for that reason.

[09:55:06] And in full disclosure, I used to work for the very law firm that his attorneys represent him with and they are a fine set of attorneys that certainly have earned the reputation. But it does not change the fact that this is, indeed, a big scar on the Fox News Network legacy, whether it was paid by Bill O'Reilly and otherwise, precisely because that the prior lawsuits where Fox News said, we had no idea this was going on, this now sounds like, in fact, they may have been, maybe not complicit, but all-knowing.

HARLOW: Brian Stelter, Laura Coates, thank you guys very much.

Coming up for us in the next hour, how does Wells Fargo come back from that explosive fake account scandal? We just sat down for an exclusive interview with the CEO of the embattled bank. How can Americans trust them again? We ask him.

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[10:00:07] BERMAN: All right, good morning, everyone. I'm John Berman.

HARLOW: And I'm Poppy Harlow.

This morning, Democrats in suburban Atlanta are lamenting the victory that slipped away